My wife received a bill for $5k from NYU after spending three days in the hospital. Since she was a poor grad student at the time, NYU waived the balance and gave her free care for 12 months.
(although, query whether NYU was struggling to attract top flight med students), I don't see how this helps anything except doctors to retire earlier and more lavishly.
Mortgage companies are comfortable extending loans to med students at rates/amounts well outside the usual actuarial math. They are known to be very trustworthy in paying off their debts. They aren't the ones suffering from the student loan crisis.
Sure, maybe some kids are scared off from med school by the debt load, but that's pretty marginal.
We need more doctors, not richer ones. This money would be much better spent on undergrad debt or creating more med school slots.
While being a doctor is certainly financially very good, there are many, many ways to make more money. I almost certainly make less money than most of my college roommates, who all went into business in some form or another and didn't accumulate hundreds of thousands in debt to get there.
Further, one of the biggest barriers to people going into primary care is the income/debt issue. A family practice doctor or pediatrician who makes $200,000 is doing very well. They are hardly living lavishly at that salary even without $200,000-$300,000 in debt before you've even bought your first house.
If you accept the premise that we need to spend less on healthcare, and the premise that physician salaries are part of the problem (which I don't accept, but seems to be a common argument), you have to address the outrageous cost of med school right off the bat.
Median debt for graduating med students is creeping north of the 200K mark.
The overwhelming majority of that is financed at standard federal interest rate levels ie 6-7%. Some grads have luck refinancing at a lowe rate down the line but this is becoming increasingly uncommon.
Couple that with basically having a 10 year lost period where you aren’t earning a regular salary, investing, or starting retirement savings, and the average 35 year old doctor is way behind the eight ball financially compared to their peers.
And to your last point - there are over 2 applicants for every seat in med school. There is no shortage of available pre-meds so redistributing this money to undergrads wouldn’t do a thing to impact the future number of doctors
would help the shortage of doctors in any way. Just that it's a better use of money.
Is the $200k mark supposed to be scary? That number is lower than I would've guessed. The anecdote friends I mentioned are well north of that.
An optimistic outlook is that it allows MDs to pursue careers without debt to influence their decision. Will more lives be saved because fewer grads will think they need to chase money? Maybe that's naive? I'm not a doctor nor familiar with the landscape.
Maybe there will just be widening income/opportunity inequality. From a poster on Hacker News:
"...the most successful universities using their funds to subsidize those who would be fine without it. I was actually made aware of this by a wealthy Stanford alumni which has a fairly broad program for undergraduate tuition assistance. Graduates of mid/low tier universities seem more and more likely to have to compete with better credentialed people with lower debt."
Overall, NYU certainly gains from this move. More competition for med school slots, and the entire university gets great PR. Maybe that encourages more donations near term, and richer doctors in 10-20 years more likely to donate more. All benefits NYU.
So, should we expect other schools to follow suit? They may feel they have to if the trend gains some momentum.
As you say, undergrads could be especially well served in this regard. Maybe there'd be less pressure to pick a major based on ROI. Maybe more What Would You Fight For and fewer Wall Street careers - no offense to all you hedgies.
ND seems well positioned financially and ethically (at least in historical identity) to conduct such an experiment.
Do we want all the rich schools giving out free educations and leaving the poorer schools to struggle more than they already are?
It will be interesting to see how the economics play out.
If you have $200,000+ in student loans it eliminates the option of primary care, because you don't make enough money to float that kinda debt along with a house, car and kids.
Physicians also enter the work force later and during residency you don't make enough money to pay down you student loan debt and have an apartment and car payment.
This isn't the 80's anymore. Heck, Medicare is about to slam office based practices with a payment change at is going to make life worse for primary care.
Call me when a NYU doctor who doesn't choose a low-paying (rural/family/etc) practice struggles to put two Mercedes in the garage, get a second home, and retire by 60 if they want to. Until then, I'm skeptical.
I've had med school friends with 3x my debtload and 1/5 my family's income (ie in residency) get approved for as much mortgage as my wife and I got approved for.
make up almost 33% of all physicians so there is a pretty good chance they will.
...come with obligations to practice primary care in underserved areas?
If NYU isn't levying that requirement, that's a game changer.
completely.
to any career commitments after graduation.
choose more altruistic fields because they have no Med School debt to pay off? That's one of the rationale's for this program. I suspect that students will continue for the most part to choose the programs that they like and will pay well as they always have done.
when they went to the free MBA model. Based on public statements and what we have heard firsthand, they thought that (1) more international students who might not have been able to afford two years in the US would come, (2) people wouldn't feel as much pressure to make as much money as possible, as quickly as possible (this one goes to your point), and (3) the graduates would feel a stronger sense of duty to give back to the school and the community.
It is still too early to tell about 2 and 3, but point 1 has certainly proven to be true. Plenty of my friends from overseas would not be here if not for the scholarship. Hell, I only came from Detroit and the only schools I considered were those that offered full or nearly full scholarships. The difference is that ASU is free for all, including those with substantially lower test scores and/or GPAs who managed to make a positive impression on the admissions people. I had a few options for a free or nearly free MBA, but plenty of my classmates had one option.
Based on the impressions I have formed through interaction and observation, I think we do seem to have a lot of 'serve the world community' types who might not be as driven by starting salary as, say, I am. I am not enough of an expert to know how much of that is influenced by the funding model, but I am fairly confident that the percentage is greater than zero.
That will certain increase the competition for slots in the NYU Medical School. I wonder if other top Med Schools will follow suit.
Needs an endowment of about 550M to sustain.